Venture Capital

Wanted: Clever companies with bright futures for making big bucks in the Mid-Atlantic region. Which is what the newly formed Meridian Venture Partners is on the outlook for. With financial backing from Meridian Bancorp and the blessing of the Small Business Administration, MVP general partners Raymond R. Rafferty Jr., George P. Keeley, Robert E. Brown Jr. and John J. Serrell, announced this week the formation of what they not-so-succinctly call...

Public stock and bond markets got you down? Venture capital is starting to look good again. VC and angel funding have rebounded strongly since 2008 and the financial crisis, and Golden Seeds Fund 2 L.P. , a vintage 2011 fund, is just one example. The fund is focused on making early-stage portfolio investments, such as Cognition Therapeutics Inc., a Pittsburgh life-sciences company, and is building a portfolio of 20-plus investments through 2013. Golden Seeds is a network of angel investors wagering on start-ups at a time when small business needs financing more than ever.

Cigna Corp. said yesterday that it was selling most of its venture-capital investment portfolio to a Connecticut investment company for "in excess of $100 million. " Landmark Ventures Inc., previously known as Technology Transitions Inc. and based in Simsbury, Conn., has a definitive agreement to buy 54 venture-capital partnerships that have 1,200 investments in nearly 800 companies, according to a joint statement. Cigna is retaining an interest in six limited partnerships and some direct investments in a few private companies but has otherwise decided to withdraw from venture capital to concentrate on long-term mortgages, private placements and leveraged buyouts.

Venture capitalists pumped more money into Philadelphia-area companies during the first half of 2000 than they did in all of 1999. Through June 30, 91 area companies received venture investments totaling $634.6 million, according to PricewaterhouseCoopers' Money Tree survey of venture capitalists. In all of 1999, 101 companies received $482.8 million. "The region is doing quite well. It's an evolutionary rather than revolutionary phenomenon that we're seeing," said Mark DeNino, managing director of TL Ventures in Wayne.

Also in this column: First USA growing again PMG Capital to sell? It's bad enough that the venture capital business has just reported the worst quarter in its history. It also looks as if some of that history will have to be rewritten. The weak tech stock market has made it unlikely that venture capital investors may ever realize some of the fat profits that venture fund managers reported for previous years, according to analysts at New York-based Venture Economics.

By and large, entrepreneurs and venture capitalists are fonts of eternal optimism. You can understand that because both groups firmly believe there is no problem that can't be solved. And exploiting new technology is generally the way they solve those problems. So if you get a bunch of investors and start-ups together in the same room in Philadelphia and survey them, as KPMG L.L.P. did last week, then you're likely to hear that things can only be getting better and better.

Venture-capital financings probably get more attention than they deserve in the media, but I understand why. Precious little information is available about many private companies. Also, closely held firms tend to be stingy about disclosing numbers, including those on sales and employment. Though only a small fraction of all businesses attracts investment from venture funds annually, successfully raising a round of capital suggests that a group of financial professionals (who have looked at the crucial numbers)

If you wanted to follow the venture money in 1999, most trails led to Internet firms. Philadelphia-area Internet-related businesses attracted multimillion-dollar investments from venture capitalists last year, leading the region to almost a half-billion dollars in venture financing. The Inquirer/PricewaterhouseCoopers Venture-Capital Survey shows that $474.9 million was invested in Philadelphia-area companies last year, an increase of more than 50 percent over 1998. In the fourth quarter alone, $171.

Bentley Systems Inc., a rapidly growing engineering software company, attracted more venture capital last year than any other computer-technology firm in the Philadelphia region. And the Exton company appears to be on its way to becoming a textbook example of how to attract venture capital, and when to go public. In this region, the $15 million it attracted, all from Bachow & Associates Inc. of Bala Cynwyd, was second only to OraPharma Inc. of Warminster, a dental-products firm that received $16 million.

Michael DiPiano and Marc Lederman did what investors are supposed to do: they bought low, almost at the bottom of the dot-com bust in 2000. Today, thanks to their nerve back then and a lot of time spent picking over local start-ups, their Radnor-based NewSpring Capital L.P. has grown into a $500 million venture firm with holdings ranging from online technology to food packaging, while staying rooted in a region not known as a venture capital center....

Sam Hinkie just completed his eighth full season with the Rockets. He has been the executive vice president of basketball operations since 2010. He was hired in Houston as the youngest vice president in the NBA in 2007. Before that, he spent two seasons as special assistant to the Rockets general manager. He is seen as an expert in analytics, the day-to-day management of basketball operations, the salary cap, and scouting college and other pro players. Before joining the Rockets, Hinkie advised two NFL teams on draft strategies and using statistical analysis to improve decision making.

Venture-capital activity may have been down in terms of deals and dollars during the first quarter nationwide, but the second-tier Philadelphia market did pretty well. Thirty-three companies raised $142.4 million during the first three months of 2013, compared with 44 companies attracting $54.5 million during the fourth quarter, according to the PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report. SevOne Inc. , a Wilmington software developer, was listed as the big wheel landing the biggest deal: $60 million.

Among the handful of venture-capital firms based in Philadelphia's leafy suburbs, First Round Capital stands out for its national reach and its rapid pace - more than a deal a week. Now it's moving downtown. Josh Kopelman , a 1993 graduate of Penn's Wharton School, started venture-backed Infonautics (he took it public in the dot.com boom), auctioneer Half.com (now part of eBay ), and security firm TurnTide (sold to Symantec ) before setting up First Round with Penn computer-scientist-turned-investor Howard Morgan in 2004.

A former Philadelphia lawyer and his wife were sentenced to federal prison Monday for defrauding a New York venture capital fund, prosecutors said. Mikel D. Jones, 56, of Boynton Beach, Fla., was sentenced to 42 months in prison. His wife, Dona Nichols Jones, was sentenced to one day. As a result of the FBI investigation of Jones, a former aide to U.S. Rep. Alcee Hastings (D., Fla.), the agency has been investigating the son of U.S. Rep. Chaka Fattah, the Philadelphia Democrat.

In 27 years at The Inquirer, one of my favorite stories I wrote was a profile of El Wingador on the morning of Wing Bowl in 2002. I was at his home at 4 a.m. and followed him through to his crowning as Wing Bowl champion for the third time. I loved that story for two reasons. One, the level of Americana - the things El Wingador said and did that morning before and during the competition were simply priceless. But the second reason is the more important one. There was more than foolishness.

The Philadelphia region finally was home to one of the nation's biggest venture capital deals last quarter. Unfortunately, what the company does won't set imaginations afire because, I'm sorry to say, developing software for the insurance industry just isn't as sexy as, say, software to help you organize and share your digital photos. Still, Exton-based iPipeline Inc. did raise $71.44 million in January, good enough to place No. 8 on a list of the nation's largest venture deals included in the PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report, released Friday.

Venture-capital financings probably get more attention than they deserve in the media, but I understand why. Precious little information is available about many private companies. Also, closely held firms tend to be stingy about disclosing numbers, including those on sales and employment. Though only a small fraction of all businesses attracts investment from venture funds annually, successfully raising a round of capital suggests that a group of financial professionals (who have looked at the crucial numbers)

By and large, entrepreneurs and venture capitalists are fonts of eternal optimism. You can understand that because both groups firmly believe there is no problem that can't be solved. And exploiting new technology is generally the way they solve those problems. So if you get a bunch of investors and start-ups together in the same room in Philadelphia and survey them, as KPMG L.L.P. did last week, then you're likely to hear that things can only be getting better and better.

Public stock and bond markets got you down? Venture capital is starting to look good again. VC and angel funding have rebounded strongly since 2008 and the financial crisis, and Golden Seeds Fund 2 L.P. , a vintage 2011 fund, is just one example. The fund is focused on making early-stage portfolio investments, such as Cognition Therapeutics Inc., a Pittsburgh life-sciences company, and is building a portfolio of 20-plus investments through 2013. Golden Seeds is a network of angel investors wagering on start-ups at a time when small business needs financing more than ever.